Premarket Report for Friday, July 30th, 2010

Economic and Financial Reports:
(7:30 am) GDP/price deflators………..……………..est: +2.6%/+0.9%
(7:30 am) Employment cost index………..……...…est: +0.5%
(8:45 am) Chgo Purchasing Mgrs’ index……….….est: 57.4
(8:55 am) Univ. of Michigan sentiment index…..….est: 67.5

Political appearances: none scheduled

Commodities:
Early metals: London Gold is trading $1170-$1171; Silver is @ $17.58-$17.63. Copper is down about two cents
Foreign Currencies: the currencies are mixed in the overnight trade. The euro rose above $1.31, hitting its highest point in nearly 12 weeks Thurs as improving euro-zone economic data helped the common currency extend a strong rally that's seen it rise more than 10% since early June. The other major currencies rose against the dollar, as well.
Energy Futures: energy futures are mostly lower in the overnight market. Crude oil/energy product futures settled higher yesterday with the aid of a weakening dollar, as traders look ahead to a report on the growth of the U.S. economy (GDP) this morning. Crack spreads widened and commercial demand from the Gulf improved moderately. 
Grains and Oilseeds: the complex is higher in the pre-market trade. Wheat was the driving force in the market once again Thursday, as ongoing concerns about the European and Russian wheat crops continued to spark bullish optimism. Traders are factoring in the potential for increased demand as a result of price adjustments in comparison to wheat. Solid weekly export sales helped buoying prices as well. However, upside price movement was capped by a lack of any other fresh supportive news, with favorable near-term crop conditions a bearish influence.
Livestock: Cash cattle traded generally steady to +$1 yesterday; most top pens brought $92-$95. The carcass cutout fell $0.64; packer demand weakened again—157 loads were confirmed by the USDA. Cash hogs were steady to +$1 in a moderate trade yesterday; the carcass cutout rose $1.11 with fairly strong demand. Three plants will be closed today, two in the Midwest and one in Virginia. The day's slaughter is expected to be reduced by around 30,000 head. On Monday, three Midwest plants will be dark, which could trim about 40,000 to 45,000 from the daily figure. Saturday’s hog kill is estimated @ 15,000-25,000 head.

Geopolitical/political/world news: House investigators accused veteran New York Rep. Charles Rangel of 13 violations of congressional ethics standards, throwing a cloud over his four-decade political career and raising worries for fellow Democrats about the fall elections; the allegations include failure to report rental income from vacation property in the Dominican Republic and hundreds of thousands of dollars on his financial disclosure statements.

Domestic equity markets: Thursday's trading fit with the market's months-long pattern. Investors are torn between upbeat earnings news from companies and reports that point to an uncertain recovery. That indecision was clear as stocks rose on strong earnings at Southwest Airlines, Exxon-Mobil and other companies; later in the session, the stock market fell on disappointment over a slight drop in first-time claims for unemployment benefits. Banking titan Citigroup indicated it will pay $75 million to settle civil charges that it misled investors about its potential losses from subprime mortgages as the housing bust hit in 2007. Google said that a “glitch” may have caused its search engine and other services to abruptly cut off from mainland China yesterday, raising more questions about the Internet company's ability to operate in the country while trying to work around the government's online censorship policies. The debt/equity markets will focus on today’s reports: GDP/price deflators, the employment cost index, the Chicago purchasing managers’ index and the University of Michigan consumer sentiment index. Merck, Chevron, Aon, McKesson, ITT Industries, Borg Warner and Arch Coal lead another long list of companies reporting Q2 results today.  

European equity markets: the other regional bourses are lower (-0.4% to -0.7% in Norway) as of this writing. Total,   Europe’s third-biggest oil company, reported a 72% rise in Q2 profit after projects started last year were ramped up; shares are trading +2.3%. EADS (the parent of Airbus) raised its target for 2010 profit and revenue as deliveries of passenger jets at its Airbus unit increase.  Alcattel-Lucent SA, France’s largest telecommunications equipment maker, confirmed full-year margin targets after posting an operating profit in Q2; shares jumped 7.2% in early trading.

Asian/Pacific Rim equity markets: equity indexes in New Zealand and Kuala Lumpur edged higher; the other regional equity indexes ended lower (-0.3% to -1.64% in Japan). Japan’s industrial production unexpectedly fell. Honda's Q2 profit ballooned to a record $3.2B, and the carmaker raised its full year earnings forecast as sales grew in North America, Japan and the rest of Asia. Samsung's Q2 rose 82% to a record high as sales of semiconductors, flat panels and TVs climbed, but the electronics giant warned that intensifying competition in areas like mobile phones could dent earnings in coming quarters; shares fell 2.1%. Mizuho, Japan’s third-largest lender by market value, lost 1.4% amid concerns about the health of the world’s second-largest economy. Macquarie, Australia’s biggest investment bank, slumped 3.1% after saying some of its businesses are set to report lower earnings. Sony and Panasonic, the world’s largest consumer-electronics makers, climbed more than 3.5%.

David Andalman
Market Analyst
Commodity Trading Advisor
Robbins Futures Inc.

1-800-859-1958
1-773-714-8361

**Trading futures involves significant risk of loss and is not suitable for everyone. Past performance is not
necessarily indicative of future results.This is not an offer or solicitation to buy or sell futures or securities.